BILL ANALYSIS Ó
AB 2109
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ASSEMBLY THIRD READING
AB 2109 (Daly)
As Amended May 6, 2014
Majority vote
LOCAL GOVERNMENT 9-0 REVENUE & TAXATION 9-0
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|Ayes:|Achadjian, Levine, Alejo, |Ayes:|Bocanegra, Harkey, Beth |
| |Bradford, Gordon, | |Gaines, Gordon, Mullin, |
| |Melendez, Mullin, Rendon, | |Nestande, Pan, |
| |Waldron | |V. Manuel Pérez, Ting |
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APPROPRIATIONS 17-0
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|Ayes:|Gatto, Bigelow, | | |
| |Bocanegra, Bradford, Ian | | |
| |Calderon, Campos, | | |
| |Donnelly, Eggman, Gomez, | | |
| |Holden, Jones, Linder, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Wagner, | | |
| |Weber | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires the State Controller (Controller) to report
annually on the imposition of each locally assessed parcel tax,
as specified, and requires each county, city, and special
district to provide any information required by the Controller
in order to complete the report. Specifically, this bill :
1)Requires the Controller to report annually on the imposition
of each locally assessed parcel tax, including, but not
limited to, the following:
a) The type and rate of parcel tax imposed;
b) The number of parcels subject to the parcel tax;
c) The number of parcels exempt from the parcel tax;
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d) The sunset date of the parcel tax, if any;
e) The amount of revenue received from the parcel tax; and,
f) The manner in which the revenue received from the parcel
tax is being used.
1)Requires each county, city, and special district that assesses
a parcel tax to provide any information required by the
Controller in order to comply with 1) above.
2)Requires the Controller to adopt regulations to prescribe the
format by which the local agencies shall report the
information.
3)Requires the Controller in implementing the provisions of the
bill to utilize existing funds or resources.
4)Defines "parcel tax" to mean "a tax levied by a local agency
upon any parcel of property identified using the assessor's
parcel number system or upon any person as an incident of
property ownership pursuant to the California Constitution
(Section 4 of Article XIII A) that is collected via the annual
property tax bill."
5)Provides that if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made pursuant to current law governing state
mandated local costs.
EXISTING LAW :
1)Authorizes cities, counties, and special districts to impose a
general tax for general governmental purposes with the
approval of a majority of voters.
2)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
3)Authorizes a parcel tax to fund a variety of local government
services subject to approval of two-thirds of the voters.
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4)Restricts parcel tax revenue to only fund the programs,
services, or projects that voters approved.
5)Requires a county tax bill to include specified information
including the billing of any special purpose parcel tax.
6)Requires the Controller to compile and publish on its Web site
annual report summarizing local agencies' finances, including
their revenue sources.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)One-time General Fund (GF) costs to the Controller of
approximately $450,000 to develop the systems and procedures
required to collect, analyze, and publish the data in the
reports; ongoing annual GF costs of approximately $50,000 to
$100,000 thereafter.
2)Significant reimbursable costs to counties, cities, and
special districts that assess parcel taxes to modify systems
to report the required information.
COMMENTS :
1)Purpose of this bill. Existing law requires the Controller to
compile and publish on its Web site annual reports summarizing
local agencies' finances, including their revenue sources.
These reports are based on the financial data submitted to the
Controller by the counties, cities and special districts, and
provide detail on the aggregate amount of various taxes
collected by each local agency, including the county
allocation of ad valorem taxes on real property,
voter-approved taxes, property assessments, and special
assessments. This bill would add to the annual report
specified information on the imposition of each locally
assessed parcel tax, including, but not limited to, the parcel
tax type and rate, number of parcels subject to and exempt
from the tax, sunset date, and amount of revenue received from
the parcel tax. Each local agency would be required to
provide any information to the Controller necessary to comply
with the requirements in this bill. The local agencies would
then report this information to the Controller in a format
prescribed by the Controller's regulations. This bill is
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sponsored by the California Taxpayers Association.
2)Author's statement. According to the author, "This bill seeks
to provide transparency on parcel taxes especially since over
the past several decades, they have become an increasingly
popular option of local entities, such as cities, school
districts, water and waste districts looking to raise revenue
for various programs."
3)Parcel taxes. California Constitution Article XIII Section A
allows cities, counties, and special districts, by a
two-thirds vote of the qualified electors in that
jurisdiction, to impose special taxes, except ad valorem taxes
on real property or a transaction tax or sales tax on the sale
of real property within that city, county or special district.
A parcel tax is a particular type of excise tax that is based
on either a flat per-parcel rate or a rate that varies
depending upon use, size, and/or number of units on each
parcel. Proposition 13 contained a 1% limit on ad valorem
property tax; therefore, a parcel tax based upon the value of
property would constitute a violation of Proposition 13. The
California Constitution specifies that only two types of taxes
may be imposed upon a parcel of property: first, an ad
valorem property tax imposed pursuant to Article VIII and
Article XIIIA, and second, a special tax receiving two-thirds
voter approval pursuant to Section 4 of Article XIIIA. A
parcel tax must be adopted as a special tax that is not based
on the property's value.
4)Existing information on parcel taxes. According to the
Legislative Analyst's Office report entitled, Understanding
California's Property Taxes, "Recent election reports and
financial data suggest that parcel taxes represent a
significant and growing source of revenue for some local
governments. Specifically, between 2001 and 2012, local
voters approved about 180 parcel tax measures to fund cities,
counties, and special districts, and about 135 measures to
fund K-12 districts. The most recent K-12 financial data
(2009-2010) indicate that schools received about $350 million
from this source. We were not able to locate information on
the statewide amount of parcel tax revenue collected by
cities, counties, and special districts."
An Overview of Local Revenue Measures by Michael Coleman,
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author of the online California Local Government Finance
Almanac (www.CaliforniaCityFinance.com), cites data on parcel
taxes from 2001-2009 and notes that, "Over half of the
proposed parcel taxes have been for public safety or medical
services including law enforcement, gang suppression, fire
suppression and prevention, emergency medical and hospital
services, equipment and facilities. 44% of the 308 parcel tax
measures passed. Nearly half of those that failed achieved
over 55% 'yes' votes."
5)Questions for the Legislature. Current law requires specified
information to be included on each county tax bill, including
any special purpose parcel tax. Each county tax bill lists
"direct charges" which are levied on an individual's parcel
including the amount and the local agency levying the direct
charge. This bill will result in a centralized location for
parcel tax information; however, the Legislature may wish to
consider if this will provide more transparency for the
individual taxpayer that already has direct access to
information on the parcel taxes they are paying on their tax
bill.
The Legislature may wish to ask the author why the bill does
not include information on parcel taxes imposed by school
districts.
6)Previous legislation. This bill is similar to AB 892 (Daly)
of 2013, which was held in the Assembly Appropriations
Committee. AB 892 would have required the same information on
parcel taxes to be reported, but only by an annual report from
the Board of Equalization (BOE) to the Governor. The fiscal
analysis for AB 892 estimated costs to BOE of approximately
$250,000 for expanding their existing study.
7)Arguments in support. Supporters argue that in an era where
resources are scarce but demand for public services is high,
this bill will help lawmakers, voters, and business to make
informed decisions, will improve accountability and oversight
of taxpayer funds, and will help ensure that funds are spent
effectively and in the manner approved by the voters.
8)Arguments in opposition. None on file.
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Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
FN: 0003733